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The hiking industry is about to face its biggest week on Wall Street.
Lyft Inc.
LYFT, + 1.64%
has not received a very warm welcome on the public markets since its initial public offering at the end of March, but the company will seek to reverse this trend Tuesday afternoon by presenting its first report on the results as a company opened. The reaction to this could set the tone for his rival Uber Technologies Inc.
UBER, + 0.00%
, who seems ready to make waves with his own IPO later in the week.
The two transport giants have different priorities and profiles, but they raise the same concerns among investors about heavy losses, dismal profit trajectories and a continuing price war. Mr. Lyft will seek to dispel some of these fears – or at least to attract attention elsewhere – when he will face analysts publicly for the first time in his call for results.
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It remains to be seen whether the shares of Lyft and Uber will be traded primarily once the two companies are both public, or if investors will see the differences between Lyft's US-oriented and US-based businesses. driving, and the gigantic international empire of Uber that touches everything from food delivery to freight and health care.
"At this point, we believe that many investors have taken a wait-and-see approach, without investing real money in Lyft, but in the meantime 1) to see what will be the reaction of investors to the first IPO of the year. Uber and 2) Lyft publishes its first quarter as a publicly traded company, "Wedbush analyst Daniel Ives wrote Friday.
Already, analysts have chosen their favorites. Ygal Arounian, of Wedbush, recently declared his preference for Uber, as his robust platform and logistical expertise reminded him of the young Amazon.com Inc. Ives favors Uber rather than Lyft "at current levels". D.A. Tom White of Davidson remains on the sidelines for Uber due to deteriorating margins and growth in sales, but still believes Lyft's shares are a buy.
What to expect
Earnings: Analysts surveyed by FactSet expect Lyft to report an adjusted loss per share of $ 4.85. According to Estimize, which intersects the forecasts of hedge funds, academics, etc., the average projection predicts a loss of $ 2.49.
Returned: The FactSet consensus forecasts revenue of $ 740.1 million in the first quarter, while the average projection on Estimize is $ 746 million. A year ago, Lyft had recorded a business turnover of 397.2 million dollars for the March quarter.
Movement of stock: Lyft shares are down 14% from the $ 72 IPO price. Of the 24 analysts monitored by FactSet that cover Lyft's shares, 14 rate it on purchase, 8 rate it, and two call it a sale. The average stock price target is $ 75.25, 21% higher than recent levels.
What else to watch for
Lyft and Uber have increased rider promotions in the run-up to their initial public offering, and these discounts should be reflected in Lyft's most recent financial statements.
Uber said in its prospectus that it had seen an increase in promotional spending and competitive activity during the first few months of the year, which "could hurt Lyft in the first quarter as a public company" said Jake Fuller, of Guggenheim, who evaluated the action. a wedge. If this is the case, look for an impact on Lyft's participation rate or on the amount of each fare retained by the company.
Given the increased promotional activity that preceded the IPO, the key question is whether management intends to end the discount now that its offering is out of service and that the Uber is about to shape. It was thought that Lyft would increase its market share by offering cheap routes before its roadshow for investors, but the gains in shares could be less important now that the company is public.
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Although Lyft's core business is walking sales, it is involved in a number of emerging areas, such as moored bicycles and scooters, which do not yet generate much revenue while driving up costs. The company is also trying to create more business, by building relationships with companies to arrange trips for doctor's appointments or job interviews. Look for management's comments on the growth strategy of these companies and Lyft's approach to these investments.
"Right now, Lyft is making little or no profit from spending on these non-core segments," said Michael Olson of Piper Jaffray, who is overweight and has a $ 78 price goal on the stock.
Read also: Lyft short selling is being built after Uber filed the IPO documents
The company could also share more information about its international projects, following a limited launch in Canada. Brent Thill of Jefferies, which rates the stock as a $ 86 buy target, expects that future expansion in Canada may contribute to higher earnings in the coming quarters. It also ensures the improvement of margins and indicators per trip.
Non-financial indicators are important when evaluating Lyft's results, and the company is expected to see continued growth in the number of active passengers and trips made. In December, Lyft had 18.6 million active passengers out of a total of 178.4 million trips. Susquehanna's analyst, Shyam Patil, expects the major growth factors in the number of runners to include marketing and increased driver supply, as well as geographic expansion. He evaluates the stock to neutral with a target of $ 57.
Wedbush's Ives lowered its price target on Lyft shares from $ 80 to $ 67 on Friday.
"Buyers are looking for a solid print / guide and … a step in the right direction after a brutal first month for Lyft (and its investors)," Ives wrote.
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